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BOUND BY 



EISTER & SMETHIE I 



105-107 GOVERNOR ST. 
l RICHMOND. VA.. 










UNITED STATES DEPARTMENT OF AGRICULTURE 




o^rw*. 



BULLETIN No. 501 

OFFICE OF THE SECRETARY 

Contribution from the Office of Farm Management 

W. J. SPILLMAN, Chief 




Washington, D. C. 



PROFESSIONAL PAPER 



February 20, 1917 



A STUDY IN THE COST OF PRODUCING MILK 
ON FOUR DAIRY FARMS, LOCATED IN WIS- 
CONSIN, MICHIGAN, PENNSYLVANIA, 
AND NORTH CAROLINA. 

By Morton O. Cooper, Scientific Assistant; C. M. Bennett, 
Agriculturist, and L. M. Church, Assistant. 



CONTENTS. 



Page. 

The scope of the study 1 

Locations and descriptions of farms where 

cost records were obtained 2 

Methods of procuring data 4 

Factors involved in the cost of producing 

milk 4 

Feed and bedding 5 

Labor 10 

Use of buildings 12 

Use of equipment 12 

Use of bull 13 

Interest 13 

Depreciation 13 



Page. 
Factors involved in the cost of producing 
milk— Continued. 

Miscellaneous items 14 

Overhead 14 

Credits other than milk 14 

Quantity of milk produced 16 

Net cost per unit of product 17 

Data from other sources 19 

Discussion of results : 21 

Relation of individual cow to cost of produc- 
tion 29 

Summary 33 

Literature cited 34 



THE SCOPE OF THE STUDY. 

Concerning an enterprise so extensive as dairying, it is important 
that something be known of the cost of production of the principal 
dairy products and the economic factors affecting each. It has been 
found that by making a detailed study of the business on an indi- 
vidual farm it is possible to draw conclusions which, in a general way, 
hold true for other farms of the same type operating under similar 
conditions. By means of carefully kept cost-accounting records the 
Office of Farm Management has procured data on the cost of producing 
milk on four dairy farms of the better sort, located in separate and 
distinctive dairy regions, namely, those of Wisconsin, Michigan, Penn- 
sylvania, and North Carolina. These records cover periods of from four 
to seven years. It is the purpose of this bulletin to outline the prob- 
lem of obtaining the complete cost of producing milk on these farms 
and to show the relationship among the various items making up the 
total cost, as indicated by the data procured. 

68922°— Bull. 501—17 1 



2 BULLETIN 501, U. S. DEPAKTMENT OF AGKICULTURE. 

LOCATION AND DESCRIPTION OF FARMS FROM WHICH COST RECORDS 

WERE OBTAINED. 1 

The four farms from which data were obtained for this publication 
are located, respectively, in Dane County, Wis.; Macomb County, 
Mich.; Chester County, Pa.; and Edgecombe County, N. C. These 
farms will hereafter be mentioned as the " Wisconsin farm/' the 
" Michigan farm," the " Pennsylvania farm," and the " North 
Carolina farm." 

THE WISCONSIN FARM. 

The Wisconsin farm is representative of milk production on farms 
where there is an abundance of pasture. This farm, consisting of 
550 acres, has about 100 acres of nearly level land under cultivation, 
and the remainder, which is rolling and sidehill, is in pasture and 
woods. Most of the rolling land is too rough for cultivation, but 
has a naturally fertile soil which furnishes an abundant growth of 
grass throughout the summer months. This farm is best suited to 
a type of live-stock farming that provides for the profitable use of 
pasture. Small grain, corn, mixed hay, and alfalfa are grown in the 
cultivated area. Most of the corn is made into silage. These crops 
are all fed to live stock, and in addition some concentrates are pur- 
chased. 

The dairy herd normally consists of about 50 high-grade and pure- 
bred Jersey cows, two registered bulls, and about 40 calves and young 
stock. The practice is to have the cows freshen during the early fall, 
so that the heavy production comes during the fall and winter months, 
when prices of butter fat are highest. Also, the increased labor 
required in the production of crops comes at a time when less labor is 
needed in the care of the dairy herd, thus providing a more uniform 
distribution of labor throughout the year. For four years, 1909-1912, 
the milk was hauled to a local creamery and sold on the butter-fat 
basis. The skim milk was returned to the farm and fed to the calves 
and pigs. The skim milk not needed for the calves has made it pos- 
sible to raise 50 to 75 pigs per year. Some young stock is sold, be- 
cause more is normally raised than is needed to keep up the herd. 

THE MICHIGAN FARM. 

The Michigan farm is an example of milk production on farms where 
no natural pasture land is available. This farm, containing about 
195 acres, lies well and is practically all tillable land. During the 
summer 15 to 20 acres are used by the cows for exercise and pasture, 
and the remainder of the farm is devoted to the production of crops 
which are consumed on the farm. The whole business of the farm 
centers around the dairy enterprise, and practically all of the receipts 

^Acknowledgment is due Mr. C. I. Bn'gham, of Wisconsin; Mr. C.eo. A. True, of Michigan; Mr. C. G. 
Huey and his father, Mr. A. B. Huey, of Pennsylvania; and Mr. H. L. Brake, of North Carolina, for their 
hearty cooperation in furnishing the detailed reports that made this publication possible. 



A STUDY IN THE COST OF PRODUCING MILK. 3 

are from dairy sales. The herd consists of about 50 grade and pure- 
bred Jersey cows, one or two bulls, and enough heifers to replace cows 
discarded and maintain the herd at the desired number. The use 
of a pure-bred sire and the careful selection of heifers has enabled the 
owner to increase the value of the herd during the record period. The 
cows are stall-fed the entire year, and silage has an important place 
in the ration. The dairy products are sold as milk, cream, and ice 
cream, and good prices are obtained. 

THE PENNSYLVANIA FARM. 

The Pennsylvania farm is within the market-milk zone of Philadel- 
phia and is an example of the production of market milk on many 
diversified farms where dairying is the principal source of income. 
There is enough rough and rolling pasture land not suitable for culti- 
vation to carry from 40 to 50 head of cattle. The farm contains 
about 200 acres of fertile and rolling land not unlike many other 
farms in the southeastern part of the State and the adjacent parts of 
Maryland. Corn, wheat, and hay are grown in a 6-year rotation. 
It has been found more profitable to sell wheat and a part of the hay 
and to buy some concentrates than to grow all the concentrates 
required for feed. Enough corn is put into silos to make about 200 
tons of silage each year; thus the second-year corn land is cleared in 
time for the sowing of the first-year wheat. 

The herd contains about 35 grade cows, some Holstein and others 
Guernsey; a pure-bred Guernsey bull, and several head of young 
stock. The milk is shipped in 40-quart cans from a near-by station 
to a dealer in Philadelphia. 

THE NORTH CAROLINA FARM. 

The North Carolina farm is in the Coastal Plain region, where dairy- 
ing is a comparatively new enterprise and the prices received for 
milk are relatively high. Feed prices, other than for cottonseed 
products, are also high, for most of the crop land in this region is 
devoted to cotton and bright-leaf tobacco, and grain and forage are 
not produced in quantities sufficient to supply local demand. This 
farm comprises about 120 acres of sandy soil, about hah of which is 
swampy and partially covered with soft pine. The swampy woodland 
furnishes some pasture. About one-quarter of the crop land is 
devoted to cotton and tobacco, and the rest to corn, winter oats, cow- 
peas, and clover, most of which is fed to cows and work stock. Two 
feed crops can be grown each year. On most of the land more feed 
can be grown per acre than on any of the three northern farms, because 
of the longer growing season. The herd is newly established and has 
increased in value during the record period by the introduction of 
pure-bred Holstein heifers. It consists of about 20 cows. The milk 
until 1913 was sold by the gallon to a city dealer.. During 1914 the 
milk was retailed. 



BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 



METHODS OF PROCURING DATA. 

The data contained in this publication were procured by a system 
of careful cost accounting in which the owner cooperated with the 
Office of Farm Management. In this system each farmer sent in 
daily reports showing the hours of work performed by men and horses, 
the use made of materials, the quantities of feed consumed by the 
live stock, and the financial transactions, supplemented by explana- 
tory notes. In addition to these reports, individual cow records were 
kept of milk, feed, and inventory values. 

FACTORS INVOLVED IN THE COST OF PRODUCING MILK. 

In determining the cost of producing milk it is highly important 
to know all the factors that must be considered and their relative 
importance. Indeed, one of the most important results of any cost- 
accounting investigation is the determination of the different items 
of expense and their relation to the whole. This relation is of funda- 
mental importance in efficiency studies. 

For convenience in studying the results on these four farms, the 
items of cost are grouped under the headings "Feed and bedding," 
"Labor," "Use of building/' "Use of equipment," "Use of bull," 
"Interest," "Depreciation," "Miscellaneous items," and "Overhead." 
These items are summarized in Table I, and the relative importance 
of each is shown. The ratio between each item and the total cost 
of keeping a cow per year is quite uniform in different herds where 
methods of management are similar. 

Table I, — Relative importance of factors which make up the cost of producing milk. 



Item. 



Actual cost per cow per year. 



Wisconsin 
farm. 



Michigan 
farm. 



Pennsyl- 
vania 
farm. 



North 

Carolina 

farm. 



Feed and bedding i . 
Labor: 

Cows and dairy . 

Marketing milk. 

Use of buildings 

Use of equipment . . . 

Use of bull 

Interest 

Depreciation 

Miscellaneous items . 
Overhead 



§49.23 

29.34 
2.90 
6.74 
1.28 
1.92 
2.70 



171. 77 

2 32.09 



2.67 
4.84 



3.98 
2.61 
2.87 
3.22 
.99 
1.95 
5.97 



S53.77 

21.04 
3.72 
6.62 
1.45 
1.47 
2.07 
5.13 
2.94 
4.91 



$68.06 

22.63 
6.41 
6.38 



7.64 



Total. 



101. 62 



125. 45 



103. 12 



127. 76 



RELATION OF EACH ITEM TO TOTAL COST EXPRESSED IN PERCENTAGE. 



Feed and bedding... 
Labor: 

Cows and dairy . 

Marketing milk . 

Use of buildings 

Use of equipment . . . 

Use of bull 

Interest 

Depreciation 

Miscellaneous items . 
Overhead 



Total. 



48.5 

28.9 
2.8 
6.6 
1.3 
1.9 
2.7 


57.2 
2 25.6 


52.1 

20.4 
3.6 
6.4 
1.4 
1.4 
2.0 
5.0 
2.9 
4.8 


3.2 
2.1 
2.3 

2.6 
.8 
1.5 

4.7 


2.6 
4.7 


100.0 


100.0 


100.0 



53.2 

17.8 
5.0 
5.0 
2.5 
2.8 
4.5 
2.8 
.5 
5.9 



100.0 



i On these farms part of the bedding was refuse from the mangers, thus it was necessary to consider 
feed and bedding as one item. 
2 Includes labor for marketing products. 



A STUDY IK THE COST OF PRODUCING MILK. 5 

The variation in numbers of cows in each herd is eliminated by 
reducing the costs to the cow basis. All cows in each herd, whether 
milking the full year or not, were considered on the basis of days fed 
in making the yearly average number of cows. The average number 
of cows for different years in each herd whose records are considered 
in compiling the various tables of results per cow are shown in Table II. 

Table II. — Size of herds on the four farms , by years. 



Year. 


Wisconsin 
farm. 


Michigan 
farm. 


Pennsyl- 
vania 
farm. 


North 

Carolina 

farm. 


1909 


49.50 
43.00 
44.43 
45.45 


58.00 
52.81 
49.80 
46.30 




16.38 


1910 


36.58 
31.75 
38.44 
36.70 


14.17 


1911 


12.67 


1912 


15.50 


1913 


18.75 


1914 






20.60 














45.60 


51.73 


35.87 


16.35 







FEED AND BEDDING. 

On all the farms the most important of the cost items in the pro- 
duction of milk is the expense for feed. In fact, this item is of such 
proportions that it is often used alone in connection with value of 
products in stud} T ing the relative profitableness of individual cows in 
the same herd. Frequently the mistake is made, in the absence of the 
full consideration of all the factors of cost, of figuring as net profit 
the difference between milk receipts and feed cost. On the Wiscon- 
sin, North Carolina, and Pennsylvania farms the feed is approxi- 
mately one-half of the total cost. On the Michigan farm this item 
is 57.2 per cent of total cost. The difference is caused by a difference 
in method of feeding. The first three herds depend largely upon 
pasture for summer feed, while the fourth is stall-fed throughout 
the year. 

In connection with this point it may be of interest to examine the 
feeding practice on each of the four farms. A word regarding feed 
costs is important for the purpose of showing how they were deter- 
mined. Farm-grown feeds were charged to the cows at farm value, 
which varied somewhat with the locality and quality. All purchased 
feeds were charged at actual cost, the hauling being included in the 
charge for labor. 1 Pasture was valued at the customary rate in each 
locality. Any charges for bedding are included with feeds under the 
heading of dry roughage. For the most part, however, the bedding 
consisted of refuse from the mangers, supplemented with straw and 
spoiled fodder, which had little or no value above the labor of hauling. 
The actual quantity for which a charge is made is so small on these 
farms that it is questionable whether bedding need be considered in 
the heading with feed. 

lit should be observed that these costs were obtained prior to 1915, and in making application of these 
figures due allowance should be made for variations in the cost of feed, etc. 



6 BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 

THE WISCONSIN FARM. 

Table III gives a summary of the quantity and cost of feed con- 
sumed per cow by the Wisconsin herd for the years 1909 to 1912. 
The actual cost of feed and bedding varied but little from year to 
year. However, there was a gradual and distinct change in the feed- 
ing methods. The concentrates were usually fed in the form of a 
mixture. The principal feeds in the mixture were in the proportions 
of six parts corn, three parts bran, one part each of oil meal, cotton- 
seed meal, and gluten feed. In 1909 each cow averaged nearly 1 
ton of concentrates. This was decreased during each succeeding 




Fig. 1.— Outfit for weighing silage on Wisconsin farm. Silage, as well as the grain ration, is weighed out 
to each cow. The owner finds that a definite feeding system results in increased production. 

year, and in 1912 the average quantity per cow was 1,300 pounds, or 
a little over 7 pounds per day for the period fed in the barn. 

The dry roughage consisted of clover, alfalfa, mixed hay, corn 
stover, and straw for bedding. The quantity varied with the pro- 
portion of each kind of roughage used and its quality. The decrease 
in the quantity of concentrates and dry roughage per cow was par- 
tially offset by a gradual increase in the quantity of silage. (See 
Fig. 1.) The pasture period varied with the season. The increase 
in cost the last year is due to an increase in pasture value. In spite 
of variations in quantities the total feed cost was nearly constant 
throughout the four years. 



A STUDY IN THE COST OF PRODUCING MILK. 7 

The average price per ton of the mixture of concentrates for each 
of the years was $26.56, $24.26, $24.40, and $29.40, respectively, the 
average for the four years being $26.16. The average price per ton 
of all dry roughage ranged from $7.51 to $11.48, the average for the 
four years being $8.71. The four-year average price of alfalfa was 
$12.75, mixed and clover hay $8.50, and corn stover $3.04 per ton. 
Silage, including some green corn, was valued at from $3.13 to $4 
per ton, the yearly average being $3.68. 

Table III. — Annual quantity of feed and its cost per cow on the Wisconsin farm. 



Year. 


Concentrates. 


Dry roughage. 


Silage. 


Pasture. 


Total 
feed 
cost. 


Quantity. 


Value. 


Quantity. 


Value. 


Quantity. 


Value. 


Days. 


Value. 


1909 


Pounds. 
1,920 
1,600 
1,588 
1,310 


825. 52 
19.42 
19.78 
19.26 


Pounds. 
2,005 
2,546 
1,780 
1,297 


S8.53 
9.55 
7.70 
7.46 


Pounds. 
6,754 
7,010 
7,160 
7,401 


S10. 59 
14.02 
14.32 
13.20 


184 
214 
184 

198 


S6.02 
6.42 
6.10 
8.83 


$50. 66 


1910 


49.41 


1911... 


47.90 


1912 


48.75 






Average, 4 years. 


1,605 


21.00 


1,907 


8.31 


7,081 13.03 


195 


6.84 


49.18 



THE MICHIGAN FARM. 



Table IV gives a summary of the quantity of feed consumed per 
cow and its costs for the Michigan farm herd for the years 1909 to 
1912. Only the last three years are considered in obtaining an aver- 
age to show the typical feeding methods practiced on this farm. The 
smaller quantities and value of feeds consumed per cow in 1909 are 
due to the fact that a number of heifers were fed in the herd the full 
year, although not giving milk except for a few weeks toward the 
end of the year. The larger quantity of concentrates and silage per 
cow on this farm for the year does not mean a larger daily ration, 
since the cows were stall-fed throughout the year. The use of the 
lot for pasture and exercise was charged to them on the basis of cost 
for interest, taxes, and fencing repairs. Expenses for feed and bed- 
ding are quite uniform for 1910 to 1912. Approximately 47 per cent 
of this feed cost is for concentrates, 26 per cent for dry roughage, 
25 per cent fOr silage, and 2 per cent for pasture. The concentrates 
were fed in the form of mixtures, consisting principally of bran, dried 
beet pulp, cottonseed meal, gluten feed, and ground beans. Bran 
was usually purchased in carload lots. The average price per ton of 
the mixture of concentrates was $21.84, $22.92, $24.78, and $23.52, 
respectively, the four-year average being $23.36. About one-third 
of the dry roughage consisted of alfalfa, and most of the remainder 
was timothy and clover hay, the average price per ton of each being 
$17.74 and $12.61, respectively. A small quantity of corn husks and 
straw valued at $5 per ton was used. The average yearly price for 
all dry roughage was $14 per ton, and silage was valued at $3 per 
ton each year. 



8 BULLETIN 501, L T . S. DEPARTMENT OF AGRICULTURE. 

Table IV. — Annual quantity of feed and its cost per cow on the Michigan farm. 



Year. 


Concentrates. 


Dry roughage. 


Silage. 


Pasture, i 


Total, 
feed 
cost. 


Quantity. 


Value. 


Quantity. 


Value. 


Quantity. 


Value. 


Days. 


Value. 


1909 


Pounds. 
2,220 
2,940 
2,854 
2,770 


$24.24 
33.70 
35.38 
32.60 


Pounds. 
2,900 
3,040 
2,606 
2,342 


S10.85 
19.78 
17.08 
19.10 


Pounds. 

9,880 

12,240 

11,572 

11,103 


814. 81 
18.36 
17.38 
16.72 




SI. 94 

1.24 

.95 

2.88 


$51.84 


1910 


73.08 


1911 


70.79 


1912 


71.30 




' I 








Average, 3 years 2 . 


2,855 


33.89 


2,663 


18.65 11,638 


17.49 I 1.69 


2 71.72 



1 Charge for use of lot used throughout the year for exercise. 

2 The year 1909 not included in average. 

THE PENNSYLVANIA FARM. 

Table V gives a summary of the quantity and cost of feeds con- 
sumed per cow by the Pennsylvania farm herd, 1910-1913. 

Table V. — Annual quantity of feed and its cost per cow on the Pennsylvania farm. 



Year. 


Concentrates. Dry roughage. 


Silage. 


Pasture. 


Total, 
feed 
cost. 


Quantity. 


Value. Quantity. 


Value. 


Quantity. 


Value. 


Days. 


Value. 


1910 


Pounds. 
1,399 
1,486 
1,332 
1,473 


§17.06 
19.76 
16.71 
17.51 


Pounds. 
2,020 
1,908 
2,455 
2,847 


810.23 

7.52 

12.77 

9.39 


Pounds. 
7,537 
8,915 
8,032 
8,760 


814. 42 

21.28 
19.47 
21.89 


154 
178 
193 
221 


83.55 
4.10 
4.44 
5.08 


S45.26 


1911 


52.66 


1912 


53.39 


1913 


53.87 






Average, 4 years. 


1,423 


17.76 


2,308 


9.98 


8,311 


19.27 


187 


4.30 


51.30 



In feeding concentrates, not as much difference was made in the 
quantity given to low yielding and high yielding cows as would have 
been made had the production per cow been used as the basis of 
compounding the ration. The difference, however, amounted to as 
much as SI 3 per year in the value of concentrates fed to individual 
cows. The mixture of concentrates, for the most part, consisted of 
sucrene and corn-and-cob meal. Some brewers' grains, gluten 
feeds, cottonseed meal, and dried beet pulp, were used. The dry 
roughage consisted of corn stover, alfalfa, and mixed hay, and wheat 
straw for bedding. The variation in total quantity from year to 
year is due largely to the difference in the quantity of corn stover. 
Although the quantity of silage varies somewhat from year to year, 
the average is about four tons per cow per year. The pasture 
season was increased each year by making greater use of the after- 
math on hay meadows. The average price per ton of concentrates 
for the four years was $24.38, $26.60, $25.10, and $23.78, respectively, 
the average per year being $24.95. The average price per ton of 
all dry roughage varied from $6.60 to $10.40, the average per year 
being $8.65. The charge made for silage varied from $3.83 to $5 
per ton, the average per year being $4.64. 



A STUDY IN THE COST OF PRODUCING MILK. 



NORTH CAROLINA FARM. 



Table VI gives a summary of the quantities and cost of feed con- 
sumed per cow by the North Carolina farm herd, 1908-1914, inclusive. 
Owing to a marked change in the method of feeding in 1914, when 
the cows were stall-fed most of the year, the figures for this year 
were omitted in making a representative yearly average for the 
farm. The kinds of feed available on this farm, owing to its loca- 
tion, are distinctly different from those on the three northern farms. 
The basis of the concentrates used in the ration was cottonseed meal 
supplemented with dried beet pulp. Small quantities of gluten 
feed, bran, corn meal, and patent feeds were also used. The con- 
centrates were mixed and apportioned to the cows on the basis of 
individual production, and the quantity fed per cow increased from 
year to year. A large portion of the dry roughage was cottonseed 
hulls, which were purchased locally at about $6 per ton. Other 
roughage consisted of home-grown hay, made from peanut vines, 
soy beans, cowpeas, and mixed grasses and clover. Beginning in 
1909, the addition of silage to the ration resulted in a reduction of 
both concentrates and dry roughage. However, each succeeding 
year a larger quantity of concentrates was fed, while the dry rough- 
age remained about constant, except for 1914, when the cows 
depended less on pasture. 

Table VI. — Annual quantity of feed and its cost per cow on the North Carolina farm. 



Year. 


Concentrates. 


Dry roughage. 


Silage. 


Soiling 
crops. 


Pas- 
ture 
value. 


Total 
feed 
cost. 


Quantity. 


Value. 


Quantity. 


Value. 


Quantity. 


Value. 


1908 


Pounds. 
1,957 
1,627 
2,137 
2,616 
2,740 
2,843 
3,107 


$28. 06 
23.36 
32.37 
40.40 
36.12 
41.60 
45.04 


Pounds. 
6,261 
4,566 
3,793 
3,771 
3,781 
3, 613 
5,298 


$21. 07 
13.69 
14.33 
12.91 
9.78 
12.08 
16.57 


Pounds. 




Value. 


$4.05 
3.88 
4.41 
3.02 
3.50 
3.76 
1.36 


$53. 18 


1909.. 


5,268 
2,712 
6,800 
3,013 
5,407 
6,223 


$13. 18 
6.78 
17.00 
7.53 
13.53 
15.56 


"$3." 67* 
""3." 27" 

"*6."9o" 


54 11 


1910 


61 56 


1911 


73 33 


1912 


60 20 


1913 


70 97 


1914 


85.48 






Average, 6 years J . . 


2,320 


33.65 


4,298 


13.98 


3,867 


9.67 


1.16 


3.77 


62.62 



1 1914 not included in average. 

During three summers soiling crops were used to supplement 
silage. The increased total quantity of feed consumed each suc- 
ceeding year is reflected in an upward trend in the total cost of feed 
per cow for the period. Variation in the price per ton of corn-and- 
cob meal is reflected in the total cost of feed. From 1908 to 1914 
the prices per ton paid for this meal, bought in large quantities, 
were, by years, $28.55, $28.54, $30.07, $31.04, $25, $26.50, $27, and 
$22, the average per year for the period being $28.13. The price of 
beet pulp ranged from $29.30 to $32, with an average of $30.57. The 
price per ton of the feeding mixture varied from $26.36 to $30.89, 
68922°— Bull. 501—17 2 



10 



BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 



the average being $29.03. The price per ton of corn stover ranged 
from $5 to $6. Hay ranged from $4 to $10 per ton, according to 
kind and quality. Silage was valued at about $5 per ton. The 
average price of all dry roughages ranged from $5.17 to $8.13, with 
an average of $6.51. Owing to the prices of feed materials in this 
section the average cost of feeding a cow on this farm is high. 

These records show that a ration having as a basis cottonseed 
meal, even at southern prices, is more expensive than a ration with 
corn as a basis at prices prevailing on northern farms at the time 
of this investigation. The concentrates on this farm constitute 54 
per cent of the total feed cost, which is from 7 to 20 per cent higher, 
-proportionately, than on the three northern farms. 

LABOR. 

In the production of milk the cost of labor on these four farms is 
second in importance to feed. As shown in Table I, the labor is 
approximately one-fourth of the total cost of keeping a dairy cow, 
or about one-half the cost of feed. This labor includes the work of 
men and horses required to feed and care for cows, handle the milk, 
and market the products. Man labor is charged on the basis of 
the complete cost of hired labor on each farm; that is, the rate 
per hour is obtained by adding to the cash wages the value of board 
and other perquisites and dividing this total by the total number 
of hours of all hired labor. Horse labor is charged on the basis of 
cost, and the rate per hour is obtained by dividing the total cost of 
keeping the horses on the farm by the number of hours of horse work. 

Table VII. — Number of hours of man and horse labor required per cow per year to pro- 
duce milk and deliver it at the railroad station on each of the four farms. 



Year. 


Wisconsin farm. 


Michigan farm. 


Pennsylvania 
farm. 


North Carolina 
farm. 


Man 
labor. 


Horse 
labor. 


Man 
labor. 


Horse 
labor. 


Man 
labor. 


Horse 
labor. 


Man 

labor. 


Horse 
labor. 


1909 


Hours. 
213 
214 
205 
224 


Hours. 
41 
38 
28 
24 


Hours. 
195 
260 
236 


Hours. 
28 
32 
35 


Hours. 


Hours. 


Hours. 


Hours. 


1910 










1911 






268 

277 

242 

1507 


74 


1912. . 


189 
151 


20 
22 


46 


1913 






46 


1914.'. 










U30 
















Average 


214 


33 


230 


32 


170 


21 


262 


55 







1 1914 not included in average. 

Table VII gives the hours of labor required per cow for each of 
the four farms. The highest labor requirement is on the North 
Carolina farm. This is due, in part, to the fact that the herd is the 
smallest and the distance to market greatest. The extra labor of 
bottling and retailing the milk in 1914 accounts for the greater labor 
requirement of the last year. Owing to this extra labor for retail 
marketing figures for this year are omitted in the farm average. 



A STUDY IN THE COST OF PRODUCING MILK. 



11 



The lowest labor requirement per cow is on the Pennsylvania farm, 
where the milk is handled quite efficiently and delivered at a near-by 
railroad station. The fact that the cows receive less individual 
' attention and on the average produce less may have some influence 
in making the labor requirement lower. The use of a milking 
machine during 1913 made the man-labor requirement 38 hours per 
cow less than for 1912. The actual time of milking was reduced 
about one-half. The horse labor, mostly used in delivering milk, 
remained about the same each year. With the exception of the 
Pennsylvania farm, the average man-labor requirement per cow, 
exclusive of marketing, on each of the farms for all years is approxi- 
mately 200 hours. This is equivalent to an average of 33 minutes 
per cow per day, 365 days in the year. 

The hauling of milk to market is a daily operation on each of the 
farms. The hours of labor required per cow for this work varies 
with distance from market, size of the herd, and condition of the 
road. On the Pennsylvania farm it required 13.4 hours of man labor 
for this work as compared to 40.3 hours on the North Carolina farm, 
where less milk was hauled about four times as far. On the Wisconsin 
farm, 1 mile from the creamery, it averaged 16 hours per cow. 

It is of interest to compare the man-labor requirement on the 
North Carolina farm in 1914 with other years. For nine months of 
this year the milk was retailed in the same city where it had previously 
been sold in bulk to a dealer. The actual hours of man labor required 
at the farm increased from an average of 222 hours per cow to 358 
hours. This increase of 136 hours represents mainly the increased 
labor for extra handling and bottling the milk and caring for equip- 
ment put in use when the change was made to selling at retail. The 
time spent in marketing increased from 40 hours to 149 hours per 
cow. The horse-labor requirements increased in like proportion. 

Table VIII gives the wage rates per hour for man and horse labor 
that were used in charging each herd for labor. The average rate 
per hour of man labor varied from 9 cents on the North Carolina 
farm, where the wages paid hired labor were low (about $20 per 
month with board and lodging), to nearly 14 cents on the Wisconsin 
farm, where more efficient men were paid wages that averaged about 
$32, with board and lodging. 





Table VIII. — Cost per hour of man 


and of horse labor on 


the four farms 






Year. 


Wisconsin 

farm— rate per 

hour. 


Michigan 

farm— rate per 

hour. 


Pennsylvania 

farm— rate per 

hour. 


North Caro.ina 

farm— rate per 

hour. 




Man. 


horse. 


Man. 


Horse. 


Man. 


Horse. 


Man. 


Horse. 


1909 


Cents. 
13.3 
14.2 
13.6 
13.6 


Cents. 
10.0 
8.9 
7.9 
7.9 


Cents. 
12 
12 
12 
12 


Cents. 
8 
8 
8 
8 


Cents. 


Cents. 


Cents. 


Cents. 


1910 










1911 






9„L 
9.0 
10.4 


7 7 


1912 


12.9 
13.9 


11.8 
8.8 


■ 8 


1913 


8 















12 



BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 



USE OF BUILDINGS. 

The charge for the use of buildings is made up of interest, taxes, 
depreciation, and repairs on the buildings used for sheltering the 
cows and the necessary storage of cow feed. Interest was figured at 
the rate of 5 per cent on the average of the inventory value taken at 
the beginning and end of each year's record. The actual expense for 
repairs were taken from the financial and labor cost records. The 
farm taxes were apportioned to each enterprise on the farm on the 
basis of actual inventories of taxable properties. The charge for use 
of buildings was prorated to individual cows on the basis of the 
average number in the herd. It is expected that the charge per cow 




Fig. 2. — Barn on a dairy farm in southeastern Pennsylvania, in which the annual charge per cow for 
shelter is less than $5 per year. The pasture, conveniently located, helps to keep down the labor charge. 

for the use of buildings will vary on different farms, depending upon 
the housing efficiency, the value of the buildings used, and the size of 
the herd. It is not uncommon to find farms on which the dairy build- 
ings are too high-priced to allow even a reasonably good cow to show a 
profit after paying her share of the annual cost for such buildings. The 
buildings on these four farms furnish adequate shelter for the cows at 
a moderate cost per cow. (See fig. 2.) The average yearly charge 
varies from 3.2 to 6.6 per cent of the total cost of keeping a cow. 
The average of the four farms is $4.74 per cow. 



USE OF EQUIPMENT. 



The charge for the use of dairy equipment is relatively small. 
Although the rate of depreciation on dairy utensils is high, the 



1 



A STUDY IN THE COST OF PRODUCING MILK. 13 

amount of capital so invested per cow at any one time is compara- 
tively small. Dairy equipment includes such items as separators, 
coolers, wagons, pails, cans, bottles, and other miscellaneous articles 
used in connection with the care of milk and the cows. The annual 
cost for these items includes depreciation, repairs, and interest on the 
average capital invested. The depreciation is the difference between 
the inventory value at the beginning of the year, plus the sum of all 
items purchased, and the inventory value at the end of the year. 
On these four farms this equipment charge, as shown in Table I, 
ranges from $1.28 to $3.22 per cow, which is from 1.3 to 2.5 per cent 
of the total cost of the cow per year. 

USE OF BULL. 

The net cost of keeping a bull is one of the expenses of producing 
milk. This cost includes feed, labor, interest, and depreciation. 
The last two items are in proportion to the value of the bull. Where 
heifers are raised to maintain the herd it has been proved to be poor 
economy to keep a scrub bull, however low the cost. The increased 
value at birth of the heifers sired by a bull of high quality will far 
more than offset the increased charge for use of the better bull. 
The size of the herd is also an important factor affecting the cost per 
cow. The charge for use of bull varies on each of the four farms, 
according to the number of cows and the value of the bull. This 
ranges from $1.47 to $3.52 per cow, the average being $2.44. This 
is from 1.3 to 2.7 per cent of the total cost of keeping a cow. The 
highest charge is in the smallest herd, and the smallest charge is in 
the herd where there is the largest number of cows per bull. 

INTEREST. 

There is a certain amount of money invested in the cows of the 
dairy herd upon which the owner is entitled to receive interest. 
In these records interest is charged at the rate of 5 per cent on the 
average value of the cows for the year. This item ranges from 2 to 4.4 
per cent of the total cost. The high interest charge on the North 
Carolina farm is due to the fact that several pure-bred Holstein heifers 
were purchased during the record period. 

DEPRECIATION. 

Some of the factors influencing depreciation charge are udder 
troubles, failure to breed, abortion, minor accidents, age, and death. 
Usually the loss from death is small compared with the shrinkage 
in value of cows sold at meat prices. The formula used in determin- 
ing depreciation on each of the four herds is: First inventory value 
plus the value of cows entering by purchase or otherwise, minus 
the second inventory value plus the receipts from sales of cows, 
equals the amount of depreciation for any given period. The de- 



14 BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 

preciation per cow for each year was determined by dividing the total 
for the herd by the average number of cows. 

On the Wisconsin farm there was no charge for depreciation, and 
only a small charge on the Michigan farm. The average value per 
cow increased from year to year in both of these herds during the 
record period. . Grade cows were sold while still valuable for dairy 
purposes, and their places were filled by pure-bred heifers of home 
raising. The highest depreciation charge, $5.13 per cow, is on the 
Pennsylvania farm, and, considering the average valuation per cow, 
this is a small charge. It is probable that, owing to the herd manage- 
ment, the charge for depreciation is lower on each of these farms 
than may be expected for a period of years on most dairy farms. 

MISCELLANEOUS ITEMS. 

There are a number of minor expenses in connection with the 
maintenance of every dairy herd, and for convenience these may be 
grouped under the heading of " miscellaneous items." These include 
veterinary services, fees to cow-testing association, registration fees, 
ice, and other dairy supplies. The total of these varies on each of 
the four farms, ranging from 66 cents to $2.93 per cow, which is from 
one-half of 1 per cent to nearly 3 per cent of the total cost. 

OVERHEAD. 

There are a number of items of expense in the operation of a farm 
business that can not be charged directly to the individual enterprises.. 
Important in this group are expenses for the general upkeep of the 
appearance of the farm, interest on money borrowed for general 
working capital, farm share of telephone rental, postage, and sta- 
tionery. The importance of this item may be expected to vary 
greatly with the efficiency of management of the farm business. 
On these farms the overhead expenses were distributed to the pro- 
ductive enterprises on the basis of total cost for labor and materials. 
The dairy being the most important enterprise, it is made to carry 
its proportionate share. Overhead on these four farms varies from 
$4.84 to $7.64 per cow, and is 5 to 6 per cent of the total cost. 

CREDITS OTHER THAN MILE. 

There are certain credits apart from milk and milk products, such 
as value of manure, calf, and in some cases an appreciation in value 
of cows, which must be considered in determining the net cost of 
milk. While these credits affect the net cost of milk, they in no way 
change the proportion of any of the factors entering into the gross 
cost per cow; because, were the credits subtracted from each factor 
rather than from the total, the amount subtracted would be pro- 
rated to each item on the percentage basis. The total credits other 



A STUDY IK THE COST OF PRODUCING MILK. 



15 



than for dairy products on these farms range from $12.27 to $20.33 
per cow and will offset from 25 to 30 per cent of all costs other than 
feed. (See fig. 3.) 

Table IX. — Items of credit other than milk, their annual value per cow, and their relation 
to cost other than feed on the four farms. 



Item. 


Wisconsin 
farm. 


Michigan 
farm. 


Pennsyl- 
vania 
farm. 


North 

Carolina 

farm. 




$10. 47 

4.75 

.11 

.05 


$15. 42 

4.52 

.08 


$10. 27 
1.16 


$10. 64 




4.16 




.26 






.53 




.30 










.84 


1.22 










Total 


15.38 


20.32 


12.27 


16.81 








29.3 


28.7 


24.8 


27.2 







Table IX gives these credits for the four farms, their amount per 
cow, and the relation which they bear to the costs other than feed. 
(See Table I.) 



LOCATION 
OF FARM5 



COST PER COW- DOLLARS 
40 60 80 100 



120 




WIS. 



MICH. 



PENN. 



N.G 



Mi<sc e //ane ous 



Credits o//?er than milh 



Fig. 3. — Relation between the credits other than milk and the total cost of keeping a cow on each of the 

four farms. 



VALUE OF MANURE. 



Manure is the most important credit. This was valued at $15 
per head per year for the Michigan farm and $10 per head on each 
of the others. The value of manure produced by the herd bulls was 
credited to the cows, which accounts for the increase in the figures 
given in Table IX. The higher rate per cow on the Michigan farm 
is attributable to the fact that the cows are fed in the barn all the 
year, and thus more manure is recovered than on the other farms. 



16 BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 

These values are figured on the basis of a ton of manure being 
worth $1 at the barn and on a production of approximately 1| tons 
per cow per month during the period they are kept in the stable. 
From the data en three of these farms, showing the quantity of 
manure actually hauled to the fields, it is evident that the credit 
given for manure is liberal. It is easy to overestimate the actual 
credit value of manure per cow, and before deciding on a definite 
valuation for any herd it may be well to consider the care taken of 
the manure and the quantity that is actually returned to the land 
where crops can use it. 

VALUE OF CALF. 

The value of calves at birth depends upon their breeding and sex. 
Heifer calves from high-producing grade cows are usually valued 
higher than males. In regions where the main product of the dairy 
is market milk the common practice is to raise but few of the heifer 
calves. All the bull calves and most of the heifer calves are dis- 
posed of shortly after birth. On the Pennsylvania farm the number 
of heifers selected for raising was relatively small as compared with 
the numbers sold or killed at birth, so that the credits for calf values 
in this herd is low, amounting to but SI. 16 per cow. Calf credits 
on the other three farms are 84.16. $4.52, and $4.74 per cow. 

MINOR CREDITS. 

Certain minor credits are shown on these farms as receipts for sale 
of hides, fees for bull services, fair premiums, and rebates for feed 
sacks. 

APPRECIATION" CREDIT. 

In some herds for certain years, or for a period of years, there 
may be a credit for appreciation. This may be the result of careful 
management in building up a higher producing herd by using a pure- 
bred sire and the introduction of pure-bred cows. This method of 
management accounts for the appreciation of 86.37 per cow on the 
Wisconsin farm. Adding this appreciation credit to the 815.38, as 
given in Table IX. the percentage of costs other than feed offset 
by credits on this farm is increased from 29.3 to 41.2 per cent. On 
the Xorth Carolina farm there is an appreciation for one year, which 
is more than offset by the depreciation of other years, and the result 
is an average net depreciation of 83.52 per cow, as shown in Table I. 

The question of depreciation is discussed farther on (see p. 26.) 

QUANTITY OF MILK PRODUCED. 

Table X gives the average quantity of milk produced per cow on 
the four farms for each year production records are available. On 
three of these farms the yearly average is little over 5,000 pounds 



A STUDY IN THE COST OF PRODUCING MILK. 



17 



per cow, while the Michigan farm shows a production above 6,000 
pounds. In 1909 several heifers were added to the Michigan herd, 
and their yield, while not low for heifers, pulled down the average. 
Heifers also account in part for the lower yields on the Wisconsin 
farm for 1910, 1911, and 1912. Frequent individual butter-fat tests 
were made on all except the North Carolina farm. Of these, the two 
Jersey herds, Wisconsin and Michigan, have an average production of 
256 and 281 pounds of butter fat, respectively, which gives an average 
test of 4.89 and 4.47 per cent, respectively. 

According to the Thirteenth United States Census (1910) the aver- 
age milk production per cow in the 10- leading dairy States is less 
than 4,200 pounds, and the State showing the highest production 
has an average of but 4,470 pounds. From this comparison it may 
be seen that the herds on each of these four farms are representative 
of good dairy herds. 

-Table X. — Quantity of milk and butter fat produced per cow per year on each of the four 

farms. 



Year. 


Wisconsin farm. 


Michigan farm. 


Pennsylvania farm. 


North 

Carolina 

farm. 




Milk. 


Butterfat. 


Milk. 


Butterfat. 


Milk. 


Butterfat. 


Milk. 


1909 


Pounds. 
5,550 
5,245 
4,990 
5,130 


Per ct. 
4.93 
4.90 
4.91 

4.82 


Pounds. 
274 
257 
245 
247 


Pounds. 
5,590 
6,721 
6,722 
6,102 


Per ct. 
4.44 
4.48 
4.45 
4.53 


Pounds. 
247 
301 
299 
276 


Pounds. 


Per ct. 


Pounds. 


Pounds. 
3,988 
4,542 
4,983 
5,056 
5,240 
6,381 


1910 

1911 


5,805 
5,483 
5,273 
4,832 


4.0 
4.2 
4.1 
4.1 


232 
230 
216 

198 


1912 

1913 


1914... 


:::::::.:: 






























Average 1 


5, 240 


4.89 


256 


6,284 


4.48 


281 


5,348 


4.1 


207 


5,032 


Average 2 


5,240 


4.89 


256 


6,536 


4.48 


293 


5,053 


4.1 


207 


5,142 



i Average of all years for which reports are given. 

2 Average years for which complete and comparable costs are available. These are the average produc- 
tion figures used in determining cost per unit in Table XI. The years included in this average are: Wis- 
consin farm, 1909-1912; Michigan farm, 1910-1912; Pennsylvania" farm, 1912 and 1913; North Carolina 
farm, 1911-1913. 

NET COST PER UNIT OF PRODUCT. 

Table XI shows the net yearly cost that is chargeable to the pro- 
duction of milk and the cost per unit of 100 pounds of milk, per 
40-quart can, and per quart. The cost per pound of butter fat, not 
deducting credits for skim milk and buttermilk, is also shown. The 
cost per 100 pounds of milk varies from $1.52 to $2.16, and the cost 
of other units of measure vary in like proportions. The pounds of 
milk are changed to quarts by dividing by 2.15. The gross feed cost 
on the Wisconsin farm is 1.59 cents, as compared, with 2.43 cents 
per quart of milk on the North Carolina farm. 

The relative proportion of each item of cost in the production of 
100 pounds of milk, which is equally applicable to any other unit 
used in measuring the product of the dairy, is illustrated by fig. 4. 
68922°— Bull. 501—17 3 



18 



BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 



These charts are constructed on the basis of cost per cow after de- 
ducting, pro rata, the credit for value of manure, calf, etc. 




WISCONSIN 
FARM ~" 




MICHIGAN 
FARM 




PENNSYVANIA 
FARM 




NORTH CAROLINA 
FARM 



Fig. 4.— Relative importance of each item in the cost of producing 100 pounds of milk 
on each of the four farms. 



The four dairy herds in question are well managed, and it is safe 
to say the production per cow for each is above the average of the 
dairy herds of its community. 

Table XI. — Yearly cost per cow, production per cow, and cost per unit of production 

on each of the four farms. 





Average per cow. Cost per unit of product. 


Farm. 


Total 
cost. 


Credit 
other 
than 
milk. 


Net 
cost. 


Yield. Milk. J *£*■ 




Mntl^jg" 


~ & 


Quart. 


Found. 




S101. 61 
L25. !•"» 
103. 12 
127. 76 


$21. 75 
20. 33 

12.27 
16.81 


S79. 86 
105. 12 

90. 85 

110. 95 


Pounds. 
5,240 
6, 536 
5,053 
5,142 


Pounds. 
256 
293 
207 


SI. 52 
1.61 
1.S0 
2.16 


SI. 31 
1. 38 

1. 55 
1.S6 


Cents. 
3.28 

3. 46 
3. 87 

4.64 


Cents. 

31.2 


Michigan 


35.9 




49.8 















The data compiled in this table are for the same years as those averaged in Table I. 



A STUDY IX" THE COST OF PRODUCING MILK. 



19 



It is not within the scope of this bulletin to discuss the profits 
and losses in the production of milk on these four farms. However, 
it may add interest to give the average receipts per cow from the 
sale of milk during the period covered by records, as shown in 
Table XII. Comparing the figures of Tables XI and XII, it will be 
seen that, on the average for the entire period, each of these farms 
made a profit from their dairies. 

Table XII. — Average receipts per cow from sale of dairy products on each of the four farms. 



Year. 


Wisconsin 
farm. 


Michigan 
farm. 


Pennsyl- 
vania 
farm. 


North 

Carolina 

farm. 


1909 


§88.47 
82.72 
79.08 
80.92 


$97.63 
123. 72 
101.55 
120.92 






1910 




1911 




1912 


S96. 77 | «136. 00 


1913 


113.45 1 130.76 










81.40 1 110. Qfi i 105.11 


133 38 













DATA FROM OTHER SOURCES. 

In connection with this same problem, other investigators have 
published certain results. The publications from the New Hamp- 
shire, Massachusetts, and Connecticut 1 (Storrs) agricultural experi- 
ment stations give the cost per cow in sufficient detail, so that the 
items may be studied under the groups shown in Table I. 

The relation of each item of cost to the total cost of keeping a cow 
as reported bv the three New England experiment stations is given 
in Table XIII. 

Table XIII. — Relative importance of factors which maize up the cost of producing milk 
as reported by three New England agricultural experiment stations. 2 





Cost per cow per year. 


Item. 


Connecticut. 3 


Massachusetts. 3 


Xew Hamp- 
shire. 3 




Actual 
cost. 


Per 
cent. 


Actual 
cost. 


Per 
cent. 


Actual 
cost. 


•Per 
cent. 


Feed 


S85.02 
33.60 


56.7 
22.4 


S89.24 
35.00 


54.9 
21.6 


$73.03 

32.33 

7.18 
9.05 
.53 
3.79 
4.55 
8.83 
8.44 


49 4 


Labor: 


21 8 




4 9 




3.95 


2.6 


7.50 
1.15 
4.00 
5.25 
11.25 
9.00 


4.6 
.7 

2.5 
3.2 
6.9 
5.6 


6 1 




.4 


Use of hull 


3.00 

3.75 

13.00 

7.70 


2.0 

2.5 
8.7 
5.1 


2.6 




3 1 




6 










Total 


150.02 100.0 


162. 39 


100.0 


147.73 100.0 






Credits: 


15.00 


17.00 


18.00 






Average pounds milk per cow 


6,; 


578 


6,( 


)36 


6,- 


L63 



i See a, &, and c in "Literature Cited,'-' p. 34. 

2 Other agricultural experiment stations have publications showing the cost of keeping a cow and the 
cost of producing milk, but the data are not presented in sufficient detail to be included rn this table. 

3 See a, b, and c, p. 34. 



20 BULLETIN 501, U. S. DEPARTMENT OE AGRICULTURE. 

The data from Massachusetts and Connecticut are results from the 
experiment station. herds, while the data from New Hampshire are a 
compilation from all the herds of the Lyndeboro Cow Testing Asso- 
ciation. These data differ in some respects from that procured from 
complete cost records. However, considering the difference of con- 
ditions and methods under which the herds were handled, the results 
from all these sources closely coincide. 

In each case the feed cost has been determined from actual records. 
Although many of the items other than feed were determined from 
estimates for the New England herds, they compare closely with the 
same items from actual records. By comparing Tables I and XIII, 
it will be seen that the total cost of keeping a cow, both on the two 
experiment station farms and in the cow-testing association, is some- 
what higher than on the four farms discussed above. However, in 
terms of the proportion which feed, labor, and other costs bear to 
total cost, they check closely. In the feeding of a grain ration the 
entire year the Michigan herd is handled similarly to the Connecticut 
and Massachusetts experiment station herds, and trie cost of feed in 
these three herds is 57.2, 56.7, and 55 per cent, respectively, of the 
total cost of keeping a cow. 

The New Hampshire figures were compiled from farm herds where 
pasture was influential in reducing the feed cost. In this respect 
these herds are not unlike the Wisconsin, Pennsylvania, and North 
Carolina herds, and the feed is about one-half of the total cost. 

The cost for labor, as shown by the New England records, is a little 
higher than on the four farms; however, the per cent of the total 
cost is a trifle lower. The cow-testing association record shows the 
total labor to be slightly more than one-fourth of the total cost, 
whereas at the experiment stations, where no marketing is included, 
the labor is less than one-fourth. 

The individual items other than feed and labor show greater diver- 
gencies, but considering them as a whole they compare fairly well. 
Some of the charges included in the individual items are not the same. 
For instance, "Overhead" is entirely omitted from the New England 
records, and a part of equipment-cost charges are either omitted or 
were too closely linked with other items to be separated. 

The item "Miscellaneous," as shown in Table XIII, takes care of 
a share of what might otherwise be called overhead. It also includes 
in each case a charge of about $5 per cow for bedding. This item of 
expense may show up on many herds, but was so small on the four 
farms that it was included in the feed cost. Its consideration here 
tends to offset the items not given separately on the New England 
records. 



A STUDY IN" THE COST OF PRODUCING MILK. 21 

DISCUSSION OF RESULTS. 

In taking up the consideration of the data from the four farms and 
of their practical application to the production of milk throughout the 
country, it is essential to note that milk and other dairy products are 
furnished by farms that may be divided into two general types. 
One type is the specialized dairy farm, where the source of income 
is primarily from dairy products. The whole farm organization 
is built around the dairy enterprise; labor is hired primarily to 
work on the herd ; crops are grown for consumption by the herd; and 
the income of the owner is determined wholly by the efficiency with 
which the dairy is handled. Farms of this type are^ comparatively 
few in number and are found mostly in regions near large cities where 
there is a good demand for market milk. All four of these farms tend 
toward this specialized type. The Michigan farm is the most intensive. 
The second type, the general farm, is found everywhere throughout 
the country. The herd usually numbers from a few cows to 15 or 
20, but the keeping of cows is only a part of the general farm busi- 
ness. The farmer may sell some other kind of live stock, farm crops, 
or fruit. While the receipts from cows contribute to his income, his 
success or failure financially is but partially dependent upon the 
efficiency with which he cares for his cows. On the Pennsylvania 
and North Carolina farms considerable income is derived from the 
sale of other products. 

THE FEED PROBLEM. 

The results of this study indicate that on farms where cows depend 
on pasture, with little or no gram during the pasture season, the cost 
of feed is approximately one-half the total cost of keeping the cow. 
On farms where more intensive dairying is practiced, pasture is 
limited, and a grain ration is fed throughout the year, the feed is 
nearer 60 per cent' of the cost. These facts further emphasize the 
point that, "with few exceptions, the feed bills are the real burden 
to the dairyman." 1 Naturally, then, the producer of dairy products 
who would increase his profits by economizing in cost of production 
should first consider this largest item of cost. In many cases economy 
may result from an actual Teduction of feed cost per cow, whereas, 
in other cases it may be necessary to increase the feed bills to insure 
the greatest profits. The quantity of feed supplied each cow should 
not be below the quantity she requires for the most efficient pro- 
duction. The real economic problem is to supply a palatable ration 
which contains the essential constituents in sufficient quantity at the 
lowest cost. (See fig. 5.) The fundamental principles of com- 
pounding a ration on the basis of nutrition have been determined by 
extensive experimental studies. 

1 Feeds and Feeding, Henry and Morrison. 



22 



BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 



The question of providing feed is different on each of the two gen- 
eral types of farms that maintain dairy cows. Just how near the 
specialized dairyman should come to growing all the feed required 
by his dairy herd is a question of individual business management. 1 
One man may find it most profitable to grow all the feed required, 
while another may increase his profits by supplementing the income 
from cows with crop sales and purchase a part of the feed. In a few 
localities in the United States crops may be selected that will not 
only yield a product for which there is ready sale at good prices, but 
also leave on the farm much feedable material. Sweet corn is an 
example of this type. 




Fig. 5.— A silo is usually a profitable investment in connection with the feeding of dairy cows. 

As a matter of fact, there was a wide variation on the four farms 
studied as to the practice of growing or buying the feed. On the 
Wisconsin farm concentrates were purchased in addition to feeding 
all the crops raised. The practice on the Michigan farm was similar 
in this respect to the Wisconsin farm, except that more feed was 
purchased, owing to the absence of sufficient pasture. On the other 
hand, the practice on the Pennsylvania farm was to sell wheat and 
timothy and to buy some concentrates. No roughage was sold from 
the North Carolina farm, where cotton and tobacco were important 
cash crops. The dairy cow ration was completed with purchased 
feeds. 



Seed, p. 34. 



A STUDY IN THE COST OF PRODUCING MILK. 23 

Where this practice of supplementing the dairy business with the 
production of cash crops is feasible, it is profitable for the dairyman 
to sell some crops and purchase concentrates. If, by the growing of 
a cash crop, it is possible from the net receipts of one acre to buy a 
quantity of concentrates equivalent to that which could be raised on 
1^ or 2 acres, it would be folly to grow the concentrates. In other 
words, this class of feed should not be grown when it is possible to 
raise some other crop at a greater profit without seriously affecting 
the labor required on the farm. 

The majority of the cows in the United States are found on the 
general or diversified farms. The herds on these farms are smaller 
than on the specialized dairy farm, but there are so many farms of 
this class that they produce the greater part of our dairy products, 
aside from market milk. Owing to the meagerness of the receipts 
per cow on many farms of this type, it is safe to assume that the 
complete cost of the product is often more than the actual cash re- 
ceipts. Nevertheless, cows are kept on these farms, and have beea 
kept for years. This would not be true if, on the average, their 
owners did not feel that their farms produced greater incomes with 
these cows than they could without them. 

The principal reason that this class of farmers can continue to 
produce dairy products at an apparent loss, as shown by cost ac- 
counts, is that in connection with the profitable production and mar- 
keting of crops the cows consume by-products and low-grade ma- 
terials, and also use land as pasture that otherwise would be wasted. 
Moreover, the manure recovered is beneficial in further crop pro- 
duction. The quantity of such feedable materials that otherwise 
might largely be wasted if not fed to live stock, is in great measure 
determined by the location of the farm in reference to markets. 
That is, what may be a by-product on a farm several miles from a 
railroad station or a city market may be a readily salable product 
on a farm close to market. Different cropping systems yield different 
quantities of these feedable materials. For example, a cropping 
system of potatoes, beans, wheat, and hay will yield less feedable 
by-products than corn, oats, wheat, and hay. Regardless of the 
quantity of these materials produced on diversified farms, the fact 
is that unless such materials are consumed and made into manure by 
live stock such would, in many cases, be a total waste. In practice, 
therefore, it is not a question of charging this feed on such farms at 
$3, or $5 or $7 per ton, as must of course be done in cost accounting, 
but of utilizing otherwise valueless material in such a way that it will 
return something. The problem of these farmers is to make use of 
this roughage on the farm and to convert it into a product which has 
a ready market. These farmers have found that one of the best 
ways of doing this is by feeding it to dairy cows. 



24 BULLETIN" 501, U. S. DEPARTMENT OF AGRICULTURE. 

The fact must not be overlooked that while for clearness in dis- 
cussion dairy farms have been divided into the two general types, 
in actual conditions there are farms where dairying is found in every 
degree of intensity. As the farm becomes more specialized in 
character the feeding practice must be changed to conform with the 
individual conditions. Each farmer or dairyman must formulate 
his own ration, but in so doing it is necessary that he first learn what 
his feeding problem really is, and having done this, decide upon a 
feeding practice which will produce milk so that the dairy will con- 
tribute to the maximum farm profit. 

THE LABOR PROBLEM. 

The data presented above show that the labor item is second to 
feed in importance, and is approximately one-fourth of the total 
expense of keeping a cow. With the increased demands for cleaner 
dairy products it is reasonable to expect that in many cases more 
work will be necessary, both in caring for the cows and for the milk. 
This may also require more efficient labor on many farms and perhaps 
higher wages. In attempting to reduce the cost for labor it must be 
remembered that a cow responds to good treatment, and the efficiency 
of labor has a close relationship to the profitableness of the dairy 
business. This point is emphasized by the Minnesota Experiment 
Station x in the following statement: "We know of many instances 
where the best of the dairy cows were kept and where good methods 
of feeding were practiced ; and still results fell far short of what might 
reasonably be expected, simply because the animals did not receive 
the kindly treatment which is so essential to a cow giving much milk 
for a long period." 

On specialized dairy farms where hand milking is practiced a 
number of laborers are hired primarily for work in the dairy. The 
dairy enterprise seldom provides work to keep the men profitably 
employed throughout the day, largely because more men are required 
to milk than are needed to do the other dairy work. It may be 
expected that the use of milking machines on these farms will change 
this labor requirement to some extent. Nevertheless, the same gen- 
eral principle holds good, that he who would economize on this expense 
for labor must provide other work during that part of the day when 
labor is not needed in the dairy. For this reason the growing of 
some field crops is always advisable. On each of the four farms from 
which data have been presented all labor used on the farms has been 
charged to the various enterprises at a uniform rate per hour 
Inasmuch as this labor was primarily employed for the dairy, it might 
seem logical to charge the portion thus used at a higher rate and to 
charge the labor used in the production of crops and on other farm 
work at a lower rate. At the same time, labor on the more general 

i See e, p. 34. 



A STUDY IN THE COST OF PRODUCING MILK. 



25 



farm is hired primarily for the production of crops, and the use of 
this labor in the care of live stock supplements the crop labor, making 
it seem equally logical to charge crops at a high rate and the live stock 
at a low rate per hour. But no distinction of this kind has been made 
in this bulletin. 

The cost of caring for the dairy cow on the more general farm is 
low. Extra workmen are seldom hired for this purpose. During 
the crop-growing season the cows are cared for in addition to the 
regular day's work in the field. Quite often the women and children 
do the milking, especially at times when crop work is heavy and the 
men are required to work late. Again, during the winter months 
there is little or no productive field work, and the dairy cows furnish 



DAI ry cows 




OTHER 
LIVE STOCK 



CROPS AND OTHER WORK 



MAN LABOR PER MONTH -HOURS 
HUNDREDS 




Yig. 6.— Distribution of man labor by months on the dairy enterprise as compared with the hours used 
by other live stock and that available for growing crops and other work on the Wisconsin farm, 1911. 

employment for labor that would otherwise be idle. As a result of 
these conditions the actual cash outlay for labor is frequently no 
greater with a few cows on the farm than it would be without them. 
On these general farms, the same principle which is true for the feed 
is also true for labor; that is, it is not a question of getting 15 or 20 
cents per hour for this labor, but of getting something, and in so 
doing increase the income of the farm business. 

Figure 6 is a chart showing for the Wisconsin farm in 1911 the 
distribution of man labor by months on the dairy enterprise, as com- 
pared with the hours devoted to the care of other live stock and those 
devoted to growing crops and to other necessary work. This shows 
that the most labor on the dairy comes during the period from Octo- 
ber to April. The system of winter dairying practiced on this Tarm 



26 BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 

provides for the maximum amount of labor available for other pur- 
poses during the period when most labor can be used in the pro- 
duction of crops. This also illustrates the fact that crop-production 
work does not provide full employment for labor throughout the year. 
On general farms the keeping of a certain number of cows can be 
made to supplement the crop labor and thus provide profitable 
employment all the year. 

It is far better to fill in this winter time thus, even though the 
wages returned are low, than not to utilize it at all and receive 
nothing. This is another reason why cows are maintained on general 
farms where cost records, charging labor at full rates, show the 
returns to be less than the cost. Within certain limits, they may 
add to the profits of the farm business even at an apparent loss. 

THE PROBLEM OF DEPRECIATION. 

Depreciation is a matter of little importance to the owner of a 
herd of poor cows. A poor dairy cow is ordinarily worth almost as 
much for beef as for dairy purposes and sometimes more. However, 
this item is of serious importance to the owner of high-priced dairy 
cows, for his worn-out cows are worth no more for beef than scrubs, 
and perhaps not so much. It is a known fact that annual deprecia- 
tion increases with an increase in the value of the cow as a milk 
producer. The amount of depreciation may vary greatly from year 
to year on the same herd and with different methods of management. 
On the four farms studied it is comparatively low, whereas the lit- 
erature now published indicates that on the average a much larger 
charge may be expected than was found on these farms. The Massa- 
chusetts Agricultural Experiment Station l estimates that with cows 
having an average value of $75 the annual depreciation per cow will 
amount to $11.25. The Connecticut (Storrs) Agricultural Experi- 
ment Station x found that the cost of maintaining the standard of the 
herd for a period of five years was $13.26 per cow per year. The 
records of a cow-testing association in New Hampshire 1 show the 
average life of a cow to be a little over four years. Calculations 
made from the dairy herd records published by the Nebraska 
Agricultural Experiment Station x indicate that in herds where the 
poor cows are carefully culled out on the basis of production records 
practically one-third are discarded each year, thus making the 
average life in the herd not far from three years. 2 

l Seeb, c, a, and/, p. 34. 

2 From the records published by the Nebraska Agricultural Experiment Station, Bulletin 139, it was 
found that during the period of 14 years 310 yearly records were procured from 110 different cows, which is 
an average of 2.82 years per cow. From the 71 cows which entered the herd and were later sold 198 yearly 
records were obtained. This is equivalent to an average productive life in the herd of 2.79 years. Of these 
71 cows only 16 were kept five years or more, of which nine were retained five years, four six years, one 
seven years, one nine years, and one 12 years. From the 38 cows in the herd at the close of the period 110 
yearly records were procured, which is an average o f 2.90 years per cow. Of these 38 cows 12 had completed 
but one year, while 11 had been in the herd four years or more. 



A STUDY IN THE COST OF PRODUCING MILK. 27 

In the recently-published results of a farm-management survey * it 
is shown that on 378 farms in Chester County, Pa., operated by 
owners, the length of time the average cow remains in these herds is 
4.34 years. The yearly charge for depreciation on these farms is 
very nearly $6.70 per cow. For 300 farms in Lenawee County, Mich., 
the average cow remains in the herds 4.52 years, and the yearly 
charge for depreciation is very nearly $2.14. 2 

With cows of good quality the amount of depreciation may be kept 
low by judicious selling. The heifers which are culled out can usu- 
ally be sold without serious loss. The cows not discarded the first 
year usually increase in value up to a certain age and then decrease 
in value rapidly. Some dairymen keep their depreciation item to a 
minimum by placing the cow on the market for dairy purposes just 
before this decrease comes. However, this is a profitable practice 
only from the standpoint of the seller, for it must be remembered 
that the buyer must always stand the depreciation which the seller 
has evaded. 

BUILDINGS, EQUIPMENT, ETC. 

In erecting buildings for the dairy herd profit often depends on 
discretion. It is not unusual to find places where, if the cows paid 
interest on the money invested in dairy buildings, it would be im- 
possible for them to pay for anything else. From an economic 
standpoint an investment in buildings beyond that required to pro- 
vide adequately for comfort, convenience, and sanitation is a per- 
sonal matter with the owner. While cows kept in palacelike build- 
ings are perhaps more fortunate, it is doubtful whether they are 

i See g, p. 34. 

2 U. S. Department of Agriculture, Bull. 341, pp. 93-95. In this publication the rate of depreciation 
on dairy cows does not represent the annual rate at which an animal deteriorates after it passes its prime, 
for as the calculation is made the depreciation of such animals is in part cancelled by the increase in value 
of animals before they reach their prime. The method of calculation is the same as outlined on p. 13 of 
this bulletin, with proper adjustment being made for the increase or decrease of the selling price of cows 
during the year. But the rate obtained does represent approximately the average charge which must be 
made for depreciation in determining the cost of mamtaining the dairy herd. 

For 378 farms in the Chester County, Pa., area the average annual loss on dairy cows from depreciation 
in value was 11.82 per cent of the average of the inventory values for the beginning and the end of the year. 
A similar calculation for 300 farms in Lenawee County, Mich., showed a corresponding rate of 4.07 per cent. 
The authors analyze these figures thus: 

"In making these calculations it is assumed that it costs as much on the average to raise a dairy cow as 
the average price at which cows are purchased in the respective localities. This may be in error, but even 
if the cost be considerably less, the results would not vary greatly from those given, because of the rela- 
tively small proportion of cows raised, especially in the Pennsylvania area. 

"The marked difference in the rate of depreciation of dairy cows in the two areas is due mainly to the 
difference in the prices at which cows are bought and sold in the two localities. In the Michigan locality 
the dairy farmers pay on the average S48.48 for cows and sell their discards for S42, a difference of only S6.48, 
whereas the dairy farmers in the Pennsylvania locality pay an average price of S63.84 and sell for $37.36, 
a difference of S26.48. Thus the Pennsylvania farmer loses S20 more per cow bought and sold than does 
the Michigan farmer. This accounts for the much larger annual charge for depreciation on the Pennsyl- 
vania farms. 

" In the Chester County area the farmers on the average raise 37 per cent of their cows and buy the remain- 
der. In the Michigan locality they raise 57 per cent. The proportion of the average herd discarded yearly 
is 23 per cent in Pennsylvania and 21.6 per cent in Michigan. The average length of time the average cow 
remains in these herds is therefore 4.34 years (=100/23) in Pennsylvania area and 4.52 years in Michigan 
area. The yearly percentage of deaths in the herds was 1.69 for Pennsylvania and 1.31 for Michigan."' 



28 BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 

more productive than those housed in adequate quarters for which 
they are able to pay a reasonable rental charge. On the other hand, 
it is not uncommon to find cows so poorly housed that it is not pos- 
sible for them to make a profitable yield. The location of the farm 
with reference to markets, the degree of cleanhness desired, as well 
as the size and economic productivity of the herd, are factors to be 
considered in relation to an economic investment in buildings. Build- 
ings which would be desirable and economical on a dairy farm near 
the city, where certified milk finds a ready market, would hardly be 
adapted to the use of a herd of the same size where the only market 
is a local cheese factory or creamery buying on the butter-fat basis. 
Neither would a herd having an average production per cow of 4,000 
pounds of milk justify the same investment in buildings and equip- 
ment as one having an average of more than 6,000 pounds per covv. 

The investment per cow in dairy buildings on the four farms dis- 
cussed in previous pages is moderate, being $84 on the Wisconsin 
farm, $50 on the Michigan, $83 on the Pennsylvania, and $80 on the 
North Carolina farm. A larger herd is one reason for the lower 
investment per cow on the Michigan farm. Other things being equal, 
the larger the herd that can be accommodated with a given invest- 
ment the lower the amount per cow. 

The question of an economic investment in equipment and sup- 
plies is closely related to that of buildings, and the same general 
principles hold true in both cases. Expensive milk coolers and ice 
supplies, which may be absolutely necessary in the production of 
high-grade milk for a special market, might be both unnecessary and 
extravagant in the production of cream to be sold on the butter-fat 
basis. In other words, expenses for buildings, equipment, and sup- 
plies should never be so high as to make it difficult or impossible to 
realize a reasonable dividend on the capital invested in the herd. 

The other items in the total cost of milk, including interest, ex- 
pense for use of bull, miscellaneous items, and overhead, depend 
quite largely upon the efficiency of the management of the dairy 
herd and farm business. The charge of interest on money invested 
in cows is in direct proportion to the value of the cows. 

The charge per cow for use of bull is largely in proportion to the 
value of the bull and the number of cows in the herd. In attempting 
to raise the general productivity of the herd through the selection 
and raising of heifers from the best cows, the influence of the quality 
of the bull in the herd is felt for years, and, within reasonable limits, 
any additional cost because of his quality will be far more than offset 
by the increased value of the heifer calves. Furthermore, there is a 
good market for calves of good breeding, and those not needed in the 
herd can be sold for much better prices than those sired by a scrub 
bull. 



A STUDY IN THE COST OF PRODUCING MILK. 



29 



The amount of the charges for miscellaneous items and overhead 
varies with the size, type of the business, and efficiency of the man- 
agement: 

In view of the fact that the assumption frequently has been made 
that the value of manure and calf will offset the costs other than 
feed, it is of interest to note the relation of these credits to the total 
cost of keeping a cow on the four farms. This relationship is shown 
in figure 3, page 15, data for which are taken from Tables I and IX. 
On these farms the credits for these items do not equal the cost items 
other than feed and labor combined and range from 25 to 29 per cent 
of items other than feed. 



RELATION OF INDIVIDUAL COW TO COST OF PRODUCTION. 

In the previous paragraphs the discussion of the data has related 
to the dairy herd as a unit. By referring to Tables XI and XII, it 
may be seen that each of the four farms shows a net profit per cow 
on this basis. The data from each of these farms were also obtained 
in sufficient detail to permit a study of the individual cows in rela- 
tion to profitableness of production. Table XIV shows the relation 
of milk production and the cost per cow to the cost per 100 pounds 
of milk, based on data from 443 complete yearly records on four 
farms. The records were divided into production groups on the 
basis of even thousands of pounds per cow, beginning with those pro- 
ducing 3,000 pounds and less and ending with those having a pro- 
duction of over 8,000 pounds. The average production of 16 cows 
in the first group was 2,349 pounds, costing $83.90, of which $43.93 
was for feed. The average production of 111 cows in the 5,001 to 
6,000-pound group was 5,450 pounds, costing $114.42, of which 
$59.91 was for feed. The average production of 36 cows in the 8,000 
group and over was 9,049 pounds, costing $153.65, of which $80.45 
was for feed. 



Table XIV. — Relation of milk production and the cost per cow to the cost per 100 pounds 
of milk, based on data from 443 complete yearly records on four farms. 1 



Basis of classification. 



Production of milk per cow: 

3.000 pounds and under. 

3.001 to 4,000 

4,001 to 5,000 

5,001 to 6,000 

6,001 to 7,000 

7,001 to 8,000 

Over 8,000 



Number 
of cows. 



16 
33 
78 
111 
109 
60 
36 



Produc- 
tion. 



Pounds. 
2,349 
3,648 
4, 596. 1 
5, 450 
6,445 
7,513.5 
9,049 



Average per cow per 
year. 



Feed 
cost. 



$43. 93 
49.47 
55.00 
59.91 
62.85 
70.38 
80.45 



Other 
cost. 



$39.97 
45.01 
50.04 
54.51 
57.18 
64.04 
73.20 



Total 
cost. 



S83.90 
94.48 
105.04 
114.42 
120. 03 
134. 42 
153. 65 



Average per 100 
pounds of milk. 



Feed 

cost. 



$1.87 

1.36 

1.20 

1.10 

.93 

.94 



Total 
cost. 



S3. 57 
2.59 
2.29 
2.10 
1.86 
1.79 
1.70 



1 The cost for individual cows on each farm was determined as follows : The item of feed was obtained from 
individual records; the items of labor, use of buildings, use of equipment, use of bull, and miscellaneous 
items for each year were divided pro rata on the basis of numbers; the items of interest and depreciation 
were obtained for individuals from inventory valuations; the item of overhead expenses was distributed 
on the basis of total cost for labor and materials the same as explained on p. 14. 



30 



BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 



The data in table XIV show the relation between the cost of keep- 
ing cows of varying milk yield and the cost of the milk. The same 
data are also shown in graphic form in figure 7. It will be noticed 
that as milk yield increases there is also an increase in the feed cost 
and in other cost items, but not in the same proportion. Cows yield- 
ing less than 3,000 pounds produced milk at a cost of $3.57 per 
hundred. Those yielding 5,001 to 6,000 pounds produced it at $2.10 
per hundred. Those yielding over 8,000 pounds produced it at 
$1.70 per hundred. It is apparent, in so far as conclusions can be 
drawn from the records of these four herds, that the cost of producing 
milk from low-yielding cows is very high and that this cost gradually 
decreases with better cows. This decrease in cost is much greater 



»3.50 

•c 

d 3.10 

£ 

O 

§ 2.70 

O 
«L 

O 

o 

£ 2.30 

ul 
Ol 

(/> 
O 

1.90 














































































































YIELD OFMll-K 
PER COW 
POUNDS 


Z3456 789 
THOUSANDS 



Fig. 7.— Relation between annual yield per cow and cost per 100 pounds of milk on the four farms. 

between the very poor cow and the cow of medium quality than it is 
between the medium cow and the good cow. For instance, milk from 
cows producing from 3,001 to 4,000 pounds of milk per year costs 98 
cents less per hundred pounds than milk from cows producing less 
than 3,000 pounds, while milk from cows producing over 8,000 pounds 
costs but 9 cents less per hundred than milk from cows producing 
from 7,001 to 8,000 pounds. The four herds in question were of 
mixed breeds, with Jerseys predominating. In the case of higher 
producing herds, or if returns were figured in terms of butter fat 
rather than pounds of milk, different results might be expected. 
Often cows of only moderate production in pounds of milk yield 
good returns by reason of a high percentage of butterfat. 



A STUDY IN THE COST OF PRODUCING MILK. 



31 



Table XV. — Yearly savings in cost of mill: production effected on the four farms by dis- 
placinq low-yielding cows with higher-yielding cows, figured on the basis of data presented 
in Table XIV. 

(a) DISPLACING A COW PRODUCING 3,000 POUNDS OR LESS. 



Basis of classi- 
fication (pro- 
duction of milk 
per cow). 



Average 


Cost per 


produc- 


100 


tion. 


pounds. 


Pounds. 




2,349.0 


$3.57 


3,64S.O 


2.59 


4, 596. 1 


2.29 


5, 450. 


2.10 


6, 445. 


1.86 


7,513.5 


1.79 


9,049.0 


1.70 



Cost of 

2,349 

pounds. 



taring 

yearly in 

'cost per 

cow. 



Performance of cow displaced 

Comparative performance of better cows. 



Pounds. 
3.000 or less. 
3,001 to 4,000 
4, 001 to 5, 000 
5, 001 to 6, 000 
6; 001 to 7; 000 
7, 001 to 8, 000 
Over 8, 000 



$83.90 
60.84 
53.79 
49.33 
43.69 
42.05 
39.93 



S23. 06 
30.11 
34.47 
40.21 
41.85 
43.97 



(6) DISPLACING A COW PRODUCING 3,001 TO 4,000 POUNDS. 



Performance of cow displaced. 



Comparative performance of better cows. 



3,001 to 4.000 
'4, 001 to 5, 000 
5. 001 to 6. 000 
6', 001 to 7. 000 
7, 001 to 8, 000 
Over 8, 000 



3,648.0 


$2.59 


4, 596. 1 


2.29 


5, 450. 


2.10 


6,445.0 


1.86 


7,513.5 


1.79 


9, 049. 


1.70 



Cost of 3,648 
pounds. 
$94.48 
83.54 
76.61 
67.85 
65.30 
62.02 



S10.94 
17.87 
26.63 
29.18 
32.46 



(c) DISPLACING A COW PRODUCING 4,001 TO 5,000 POUNDS. 



Performance of cow displaced. 



Comparative performance of better cows. 



4.001 to 5.000 
5,001 to 6, 000 
6, 001 to 7, 000 
7, 001 to S, 000 
Over S, 000 



4, 596. 1 


$2.29 


5. 450. 


2.10 


6. 445. 


1.86 


7,513.5 


1.79 


9,049.0 


1.70 



Cost of 
4,596.1 
pounds. 
$105. 04 
96.52 
85.49 
82.27 
78.13 



$8. 52 
19.55 
22.77 
26.91 



(d) DISPLACING A COW PRODUCING 5,001 TO 6,000 POUNDS. 



Performance of cow displaced 

Comparative performace of better cows. 



5,001 to 6.000 


5,450.0 


$2. 


10 


6. 001 to 7. 000 


6, 445. 


1 


86 


7, 001 to 8, 000 


7,513.5 


1 


79 


Over 8, 000 


9,049.0 


1 


70 



Cost of 5,450 

pounds. 

$114.42 

101.37 

97.56 

92.65 



$13.05 
16. 86 
21.77 



(e) DISPIACING A COW PRODUCING 6,001 TO 7,000 POUND; 



Performance of cow displaced 

Comparative performance of better cows. 



,001 to 7, 000 

, 001 to 8, 000 

Over 8, 000 



6, 440. 
7,513.5 
9, 049. 



SI. 86 
1:79 
1.70 



Cost of 6.445 
pounds. 
$120. 03 
115. 37 
109. 57 



$4.66 
10.46 



From trie standpoint of economic milk production it would seem 
that the easiest step in the building up of a poor dairy herd is rela- 
tively the most profitable. Certainly the step from the poor cow to 
the cow of medium capacity is the one which promises the largest 
dividends on a modest expenditure of money and effort. In this 
connection the reader should study Table XV, which shows the 
gams resulting from progressively displacing a low-yielding cow with 



32 



BULLETIN 501, T7. S. DEPARTMENT OF AGRICULTURE. 



a better one. In these particular herds for every 7,000-pound cow- 
that displaced a 3,000-pound cow there was an annual gain of over 
$40, while for every 8,000-pound cow which displaced a 7,000-pound 
cow there was a gain of about $5. From the foregoing it will be 
seen that the dairyman with limited capital need not be discouraged, 
as it is practicable for him to build up a highly productive and 
profitable herd. 



< 

£ 1.80 
Q 

-I 
z 

L. 1.60 
o 

u5 
Q 

2. 

£l.40 

o 

o 

DC 

£1.20 

1- 

<n 
o 


° 1.80 

UJ 

id 






\ 

\ 


> 


















\ 

% 

\ 
\ 
\ 




















\ 

\ 
% 




















\ 




















"*"•».., STORRS 


















4 FARMS 


YIELD OF 
MILK PER 
COW- POUNDS 


234 56789 
THOUSANDS 


*IOO 
10 

J 90 

_i 
_i 
o 

Q 

i 80 

O 


cc 
ui 

h 
10 

O 

o 

O 

ui 60 

UJ 

u. 

50 


















STORRS 














-* # 


* 


•' 














/'' 




4 FA RMS 






/ 


* 


































































YIELD OF 

MILK PER 

COW 

POUNO.S 




I 34 5 6 7 8 9 

THOU SANDS 



Fig. 8.— Data from the four farms and from Connecticut (Storrs) Agricultural Experiment Station. 
Upper: Relation between feed cost per 100 pounds of milk and production per cow. Lower: Relation 
between feed cost per cow and production per cow. 



A STUDY IN THE COST OF PRODUCING MILK. 33 

This result is in keeping with, common experience both with animals 
and crops, namely, that the greatest savings are achieved in changing 
from the very poorest animals or crops to those of medium produc- 
tion or better. 1 

Most of the cows producing less than 4,000 pounds in these herds 
were Tieifers. This illustrates a factor of economic importance 
connected with maintaining the standard of the herd by the intro- 
duction of heifers. Normally, heifers do not produce as much as 
mature cows. Moreover, many heifers, even though carefully 
selected, do not measure up to expectations and must be discarded. 
As a result, even in the most efficiently managed herds, the pro- 
duction from heifers is comparatively low, and the cost per unit of 
product relatively high. In connection with the discussion of this 
topic it is of interest to note the relative feed cost of cows on these 
four farms according to their milk production and to compare the 
same groups in their relation to the feed cost per 100 pounds of milk. 
These comparisons are made in graphic form in figure 8, which also 
includes curves constructed from records published by the Connecti- 
cut (Storrs) Agricultural Experiment Station. 2 There were no cows 
in the station herd that produced less than 3,000 pounds. Owing 
to higher prices, the actual feed cost per cow and per unit of product 
was greater for the cows of each group in the station herd. The 
data from the four farms show that it costs more to keep a cow that 
gives a high yield of milk than one giving a low yield. However, 
within the limits of production shown by these cows, the profits 
from the high-producing animals are greater, because the increased 
cost of keeping a cow is not in proportion to increase in yield. This 
results in a lower unit cost for the product and a greater margin of 
profit, both per unit and per cow. These data emphazise the fact 
that the quality of the individual cow is a highly important factor 
in the cost per unit of product. 

SUMMARY. 

While the results derived from the cost records from the four farms 
in question may be said to be strictly applicable only to the farms 
upon which the studies were made, nevertheless they are representa- 
tive of certain types of dairying, and the fundamental facts developed 
in studying them will be of considerable practical value to all milk 
producers and especially valuable to those operating under similar 
conditions. 

From the information on these four farms there appears to be a 
fairly uniform relationship between various items entering into the 
cost of milk production according to the type of dairying followed. 

i " It is both easier and more profitable to inerease * * * a small product per cow than a large 
one."— Dept. Bui. 341. 
» See c, p. 34. 



34 BULLETIN 501, U. S. DEPARTMENT OF AGRICULTURE. 

The feed cost on these farms seems to approximate 50 per cent of the 
total cost of keeping a cow where the cows depended on pasture with 
little or no grain during the pasture season; whereas, feed cost 
approximated 60 per cent on the farms where the pasture is limited 
and a grain ration is fed throughout the year. 

Labor, the second important item in the cost of producing milk, 
amounted to approximately one-fourth of the total cost of keeping 
a cow. 

All other items, including charges for shelter, use of equipment, 
use of bull, interest, depreciation, miscellaneous supplies, and a 
share of overhead expenses, amounted to approximately one-fourth 
the total cost of keeping a cow. The credits other than milk, includ- 
ing the value of calf, manure, and minor items, did not equal the 
miscellaneous costs other than feed and labor. 

Though it cost more to keep a cow that gives a high yield than 
one giving a lpw yield, the unit cost of the milk produced fell as the 
yield per cow rose. This decrease in the cost of milk per pound was 
much greater in the step from the poor cow to the cow of fair quality 
than in the step from the fairly efficient cow to the good cow or to the 
exceptional cow. Thus, from the standpoint of economic milk pro- 
duction, it appears that the first step in building up a poor dairy 
herd (that is, replacing scrubs with grades) is not merely the easiest 
step but also the one which promises the most for a given expenditure 
of money and labor. 

The actual cost of keeping the cows varied from year to year on 
the different farms as well as on the same iarm, yet the ratio between 
each item and the total cost was apparently quite uniform where a 
similar method of management was followed. 

LITERATURE CITED. 

(a) Rasmussen, Fred. 

1913. Cost of milk production. N. H. Col. and Exp. Sta. Ext. Bui. 2. 
(6) Lindsey, J. B. 

1913. Record of the station dairy herd and the cost of milk production. Mass. 

Agr. Exp. Sta. Bui. 145. 

(c) Trueman, J. M. 

1912. Records of a dairy herd for five years. Conn. (Storrs) Agr. Exp. Sta. 

Bui. 73. 

(d) Warren, G. F. 

1914. Some important factors for success in general farming and in dairy farm- 

ing. N. Y. Cornell Agr. Exp. Sta. Bui. 349; Reasons for larger profits 
on diversified farms, pp. 691-693. 

(e) Haecker, T. L. 

1913. Feeding dairy cows. .Minn. Agr. Exp. Sta. Bui. 130, p. 37. 
(/) Frandsen, J. H., and Haecker, A. L. 

1914. Dairy herd records for fourteen years. Nebr. Agr. Exp. Sta. Bui. 139. 
(g) Spillman, W. J., Dixon, H. M., and Billings, G. A. 

1916. Farm management practice of Chester County, Pa. U. S. Dept. Agr. 
Bui. 341. 



A STUDY IN" THE COST OF PRODUCING MILK. 35 

DATA ON COST OF PRODUCING MELK ARE ALSO REPORTED IN THE FOLLOWING 

PUBLICATIONS. 

Larson, C. W. 

1916. Milk production cost accounts, principles and method. New York. 
Columbia University Press. 
Thompson, A. L. 

1915. Cost of producing milk on 174 farms in Delaware County, New York. 
N. Y. Cornell Agr. Exp. Sta. Bui. 364. 
Hopper, H. A., and Robertson, F. E. 

1915. The cost of milk production. N. Y. Cornell Agr. Exp. Sta. Bui. 357. 
Henry, W. A., and Morrison, F. B. 

1916. Feeds and Feeding. Ed. 16, 691 pp. Madison, Wis. "Feed required 

by cow and cost of producing milk and fat." pp. 395-397. 
Cooper, T. P. 

1909. The cost of producing Minnesota dairy products, 1904-1909. Minn. Agr. 
Exp. Sta. Bui. 124, U. S. Dept. Agr. Bureau of Statistics Bui. 88. 
1898-1915. Cost of producing milk. In Ann. Reports, N. J. Agr. Exp. Sta., 1897, pp. 
177-180; 1898, pp. 215-217; 1899, pp. 257-260; 1900, pp. 295-298; 1901, 
pp. 287-290; 1902, pp. 312-315; 1903, pp. 374-377; 1904, pp. 407-410; 
1906, pp. 298-302; 1907, pp. 79-82; 1909, pp. 73-76; 1910, pp. 64-67-; 
1912, pp. 194-199; 1913, pp. 314-318; 1914, pp. 154-168. 
1915. The cost of milk production. Hoard's Dairyman, vol. 48, pp. 669-670, 
Jan. 1. 



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